Neuropsychological assessment is commonly used to aid in the diagnosis of dementia, or in the differential diagnosis of dementia and depression in the cognitively impaired elderly. Psychologists who administer these procedures are also called upon to make recommendations about the patients' level of functional capacity for the purpose of aftercare planning. However, without established predictive validity of these procedures psychologists rely upon clinical judgments in predicting functional outcome. The proposed research will determine whether neuropsychological assessment of a patient during hospitalization can predict specific functional skills assessed following discharge. One hundred and fifteen elderly inpatients of a specialized geriatric unit within an academically based psychiatric hospital will be entered into the study over a three year period. Subjects will be diagnosed as either probable Alzheimer's dementia, depression, or as having mixed features of dementia and depression. While in the inpatient unit, subjects will undergo a comprehensive research neuropsychological assessment battery assembled to predict to several activities of daily living (ADL) related areas including organizational aspects of self-care, instrumental behavior, communicative skills, practical memory, management of personal affairs, and ambulantion and transportation. At two weeks and again at six months following discharge from the hospital, patients will be visited in their residences and an extensive performance test of ADL functions involving direct behavioral observation of functional capacities will be administered by an Occupational Therapist. Statistical procedures will determine the extent to which the neuropsychological procedures accurately predict a number of functional ADL dimensions. In the event that these commonly employed diagnostic procedures can predict outcome, they may become highly useful prognostic instruments that may find a significant place in post-discharge planning with thecognitively impaired elderly.